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Buying a first home is a steep challenge, but a variety of home loan programs can give you a leg up. The Maine State Housing Authority, or MaineHousing, offers programs to help qualified first-time home buyers, mobile home owners and veterans get mortgages.
National home loan programs also help make homeownership more accessible by featuring low-down-payment or low-credit-score requirements.
Investigate these mortgage options to get started on buying a first home in Maine.
National first-time home buyer programs
With their no- or low-down-payment requirements, these nationally available mortgages meet the needs of many first-time home buyers.
Conventional mortgage
Best for:
Low down payments, limited mortgage insurance premiums
What you need to know:
A conventional mortgage is a home loan that isn’t guaranteed or insured by the federal government. Conventional mortgages that conform to the requirements set forth by Fannie Mae and Freddie Mac allow down payments as low as 3% for first-time buyers or lower-income home buyers. Unlike FHA loans, conventional loans allow borrowers to eventually cancel their mortgage insurance or avoid mortgage insurance altogether if they put at least 20% down.
VA loans
Best for:
Military, low down payments
What you need to know:
The U.S. Department of Veterans Affairs helps service members, veterans and surviving spouses buy homes. VA loans are especially generous, providing competitive interest rates, often requiring no down payment or mortgage insurance. Although there is no official minimum credit score, most VA-approved lenders require scores of at least 640.
FHA loans
Best for:
Low credit score, low down payments
What you need to know:
This is the go-to program for many first-time home buyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10% down payment for a score that low. Mortgage insurance is required for the life of an FHA loan and cannot be canceled.
USDA loans
Best for:
Low down payments, rural home buyers
What you need to know:
A USDA home loan is a zero-down-payment mortgage for eligible rural and suburban home buyers. USDA loans are issued by the U.S. Department of Agriculture through the USDA Rural Development Guaranteed Housing Loan Program. There are income limitations, which vary by region. Applicants with credit scores of 640 or higher receive streamlined processing. Those with scores below that must meet more stringent underwriting standards.
MaineHousing highlights and eligibility requirements
You’re considered a first-time home buyer in Maine and may be eligible for a MaineHousing program if you haven’t owned a home in the last three years. Veterans and retired or active-duty military members are also eligible, as long as any home they currently own is sold by closing. Current or former owners of unattached mobile homes on leased land can also apply.
» MORE: Tips for first-time home buyers
Highlights
Offers mortgages with below-market, fixed interest rates.
Down payment and closing cost assistance available.
Condos, and some permanently attached mobile homes, are eligible.
Provides mortgage payment protection in case of unemployment.
Offers a free, 90-day interest rate lock for existing properties and a 210-day lock for new homes, including modular and mobile homes.
Qualified veterans, active-duty and retired military can qualify for an interest rate discount.
Mortgage and grant program available to replace old mobile homes with new, energy-efficient manufactured homes.
Eligibility
Meet income and purchase price limits.
Complete a home buyer education class to receive down payment or closing cost assistance.
Have a minimum credit score of 640.
Property must be three acres or less for existing homes and one acre or less for new homes, if the land value exceeds 30% of the overall appraised value.
New and existing single-family homes, some multi-family housing, condominiums and some mobile homes are eligible.
» MORE: Compare the best mortgage lenders for first-time home buyers
MaineHousing first-time home buyer programs
First Home Loan
Best for:
Low down payment, low mortgage rates
What you need to know:
This program offers mortgages with below-market, fixed interest rates and no- and low-down-payment options for first-time home buyers. You can pay discount points to lower the interest rate further. Zero-point and two-point loan options are available. Eligible borrowers can combine the loan with MaineHousing’s Advantage program, which provides help for down payment and closing costs. The Purchase Plus Improvement option lets borrowers include $500 to $35,000 of home improvements in the mortgage, as long as the sum of the home price and improvement costs stays within the program’s purchase price limits. All First Home mortgages come with HOPE — Home Ownership Protection for unEmployment — to help borrowers make mortgage payments if they become unemployed.
Salute ME
Best for:
Military
What you need to know:
This program offers a 0.25% discount on the interest rate for a First Home Loan to qualified veterans and retired and active-duty military who are first-time home buyers. The program can be combined with the other options available with First Home Loans, including down payment and closing cost assistance.
Salute Home Again
Best for:
Military
What you need to know:
Veterans and active-duty military don’t have to be first-time home buyers to qualify. The program offers a 0.25% discount on the interest rate for a First Home Loan. Down payment and closing cost assistance and other First Home Loan options are available.
Advantage
Best for:
Down payment assistance, closing cost assistance
What you need to know:
The program offers up to $3,500 for down payment and closing cost assistance to borrowers using a MaineHousing First Home, Salute ME or Mobile Home Self-Insured Home Mortgage. The program is available only with the zero-discount-point mortgage option. The borrower must contribute at least 1% of the loan amount, and the contribution can be a gift.
Mobile Home Self-Insured Option
Best for:
Manufactured homes, no mortgage insurance
What you need to know:
The program helps Mainers buy mobile homes when the loan-to-value is more than 80% and less than or equal to 95%. Borrowers pay a higher interest rate but don’t have to pay for mortgage insurance. The option can be combined with the Advantage program for down payment and closing cost assistance. A minimum 5% down payment is required, with at least 3% from the borrower’s own money. The purchase price limit is $175,000.
Pre-1976 Mobile Home Replacement Initiative
Best for:
Manufactured homes, energy-efficient improvements
What you need to know:
The program combines a MaineHousing mortgage with a $30,000 MaineHousing grant to replace a mobile home built before 1976 with an Energy Star-certified manufactured home. The grant, which helps pay the cost of removing the old mobile home, is in the form of a deferred, forgivable note and requires the owner to live in the new home for 10 years. Owners of pre-1976 mobile homes who meet income limits can apply.
Summary: 2021 Maine first-time home buyer programs
First Home Loan with below-market interest rates and low-down-payment options.
Salute ME program with interest rate discount on First Home Loans for veterans.
Salute Home Again with interest rate discount for veterans who are not first-time buyers.
Advantage program for assistance with down payment and closing costs on First Home Loans.
Mobile Home Self-Insured Option, a replacement for mortgage insurance for mobile home buyers.
Pre-1976 Mobile Home Replacement Initiative, a mortgage and grant program for owners of older mobile homes.
MaineHousing offers its home buyer programs through a network of approved lenders. Before you start shopping for a home, contact an approved lender to apply. The lender will explain the eligibility requirements and help you choose the right home loan and assistance program.
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